COVID-19 impact on unemployment benefits

Unemployment benefits comparison between 2019 and 2020

Published: 2020

Introduction

One of the greatest impacts of the coronavirus (COVID-19) in Australia has been on jobs – in fact, the loss of jobs, as businesses have scaled down or closed. A major indicator of the impact of loss of jobs is the increase in the number of people receiving an unemployment benefit. In June 2019 there were just over three quarters of a million people receiving an unemployment benefit; by June 2020 this figure had more than doubled, to over one and a half million (the numbers are 769,555 and 1,614,412, respectively).

In this report we provide maps, graphs and data that show the major changes in the capital cities and regional areas, based on data from the Department of Social Services (DSS 2020).

The data do not include people receiving the JobKeeper Payment, for which the data were not available by small geographical area.

Reference

DSS 2020 at https://data.gov.au/data/dataset/dss-payment-demographic-data

Unemployment benefits defined

Until recently, the payments for eligible unemployed people were the Newstart Allowance and Youth Allowance (other)[1]. From 20 March 2020, JobSeeker Payment replaced Newstart Allowance. Together, these payment types are referred to as ‘unemployment benefits’.

[1] A means tested payment for young people 16-21 years of age, who are looking for full time work or undertaking approved activities.

Impact on health and wellbeing

Those people who do not have access to secure and satisfying work are less likely to have an adequate income; and unemployment and underemployment are generally associated with reduced life opportunities and poorer health and wellbeing. Although the relationship between unemployment and health and wellbeing is complex and varies for different population groups, there is consistent evidence from research that unemployment is associated with adverse health outcomes; and unemployment has a direct effect on physical and mental health over and above the effects of socioeconomic status, poverty, risk factors, or prior ill-health (PHIDU 2020).

It is widely acknowledge that the coronavirus has impacted on the health and wellbeing of many people, through loss of income (both personal and business), loss of ability to have contact with family and friends, uncertainty and fear of the virus leading to lower rates of screening and of health implications now and into the future.

An area of particular concern has been mental health, affecting people at all ages. In particular, there have been almost daily reports of organisations telling of increasing numbers of young people seeking help. This follows on from a report that the number of children and adolescents seeking help from hospital emergency departments for mental health concerns doubled between 2004-05 and 2016-17 (Tran et al, 2019).

Reference

PHIDU 2020 at http://phidu.torrens.edu.au/notes-on-the-data/demographic-social/unemployment-benefit

Tran, N.Q., Lambeth, L.G., Sanderson, K., de Graaff, B., Breslin, B., Tran, V., Huckerby, E.J., and Neil, E.J 2019. Emergency department presentations with a mental health diagnosis in Australia, by jurisdiction and by sex, 2004–05 to 2016–17, Emergency Medicine Australasia. Volume 32. Issue 3 June 2020

Implications of changes to JobSeeker payment for health, mental health

A report from the Centre for Economic Policy Research at the Australian National University (Phillips et al 2020) notes that the Coronavirus Supplement was set high enough to double JobSeeker and associated payments, increasing them to about $1,115 per fortnight. From the end of September, the payment fell to $815. This pushed this group back to the poverty line, which according to their modelling is around $816 per fortnight. The Coronavirus Supplement is available until 31 December, returning JobSeeker to $565.70 per fortnight, well below the poverty line. As the time ends for which people have been able to suspend or delay major expenses such as rent, mortgage, electricity etc., so financial stress is likely to be exacerbated for many.

Reference

Phillips et al (2020) The Conversation, https://theconversation.com/winding-back-jobkeeper-and-jobseeker-will-push-740-000-australians-into-poverty-145308

Overview of the impact by geographical area

Although the impact has been seen across Australia, as shown in Table 1, the extent of change has generally been greater in the capital cities than in regional areas (the area outside of the capital city e.g., Rest of NSW) overall. However, many regional centres have also been impacted.

In the capital cities, the increase from June 2019 to June 2020 was greatest in Greater Sydney (2.60 times) and Greater Melbourne (2.45 times) and lowest in Greater Hobart (1.81 times) and Greater Adelaide (1.91 times). It is of note that Greater Hobart and Greater Adelaide, with the smallest increases, had the highest rates of income support payments in 2019; and that Greater Sydney and Greater Melbourne had the second and third lowest rates (after Canberra).

Table 1: Proportion of population receiving an unemployment benefit, by section of state, June 2019 and June 2020 

Click hereto see the separate details for Newstart/JobSeeker and Youth Allowance (other)

Location  June 2019 (%)  June 2020 (%)  Rate ratio* 
Greater Sydney  3.0  7.8  2.60 
Rest of NSW  6.4  11.6  1.81 
Greater Melbourne  3.3  8.2  2.45 
Rest of Vic  6.2  11.0  1.79 
Greater Brisbane  4.6  10.0  2.16 
Rest of Qld  6.5  13.0  1.98 
Greater Adelaide  5.7  10.9  1.91 
Rest of SA  8.3  13.4  1.61 
Greater Perth  5.0  10.1  2.00 
Rest of WA  7.3  12.7  1.74 
Greater Hobart  5.7  10.4  1.81 
Rest of Tas  8.2  13.4  1.63 
Greater Darwin  4.4  9.3  2.12 
Rest of NT  18.5  25.3  1.37 
Canberra  2.1  5.1  5.39 
All capital cities  3.8  8.7  2.30 
All Rest of States/NT  6.8  12.3  1.82 

*Rate ratio is the ratio of the proportion in 2020 to that in 2019

Note: These data and the data on which they were calculated are available here

The impact in the capital cities

Maps 1 and 2 show the proportion of the population aged 16 to 64 years receiving an unemployment benefit in June 2019 and 2020, with the change in the proportion from 2019 shown in Map 3.

The linkto the atlas allows you to view these maps for New South Wales as a whole, as well as the maps for 2019. Note that the highest range in the legend in 2020 is around twice that in 2019, reflecting the substantial increase in the number of people receiving these payments.

The tables here list, for the capital cities, the three Population Health Areas with the highest percentage receiving an unemployment benefit; and for regional areas list the three Local Government Areas (with a population of 500 or over).

Map 1: People aged 16 to 64 years receiving an unemployment benefit, Sydney, June 2019  Map 2: People aged 16 to 64 years receiving an unemployment benefit, Sydney, June 2020 

Map 3: Change in people aged 16 to 64 years receiving an unemployment benefit, Sydney, June 2020/ June 2019 - Rate ratio*

 *Rate ratio is the ratio of the percentage in 2020 to that in 2019.

Similar maps for the other capital cities and Rest of States/ NT can be viewed here

The impact on the equity gap

Figure 1 shows the overall increase for Australia in the proportion of the population receiving an unemployment benefit, by quintile using the Index of Relative Socio-economic Disadvantage (IRSD). It also shows that, despite the drop in the differential in the ratio between the most and least disadvantaged areas, it is still substantial, at 2.98 times in 2020, compared with 5.67 times in 2019.

Figure 1: People aged 16 to 64 years receiving an unemployment benefit, by quintile, June 2019 and 2020

 

 

Similar graphs for the capital cities and Rest of States/NT can be viewed at the links below.

Difference between Youth Allowance (other) and Newstart payments

Summary tables of these data are provided separately for Newstart Allowance and Youth Allowance (other) here. The full data, maps and graphs for these payment types can be viewed at the links below.

The longer term picture

It is important to note that, despite the strong pattern of change shown in Map 3, unemployment under this measure remains very much an issue for the socioeconomically disadvantaged.

By way of explanation, between June 2019 and June 2020, the proportion of Sydney’s population receiving an unemployment benefit increased by over two and a half times (2.60 times, from 3.0% to 7.8%). Although the increase in the least disadvantaged areas was greater than in the most disadvantaged areas (4.65 times compared with 2.06 times), the equity gap remains very large, with 3.20 times the proportion of the population in the most disadvantaged areas receiving unemployment benefits when compared with the least disadvantaged areas. In June 2019 the gap was 7.24 times, and it can be imagined that this is the level it would return to in the longer term.

Notably, the strong correlation between high rates of unemployment benefit payments and socioeconomic disadvantage in Greater Sydney in 2019, a correlation coefficient of 0.9, was still evident in 2020 (again 0.9). The inequality charts below show these details graphically.

Unemployment benefits: Maps

Single map

The Single Map presents all indicators for all areas allowing users to explore and understand patterns and trends for a range of datasets.

Unemployment benefits: Remoteness Graphs and Inequality Graphs

Remoteness Graphs

Graphs Australia NSW Vic Qld SA WA Tas NT

The Remoteness Graphs present the unemployment benefits indicators by Remoteness Area, for Australia and the State/ Territory areas (excluding ACT). For information on the Remoteness classes or interpreting the graphs, refer to the Remoteness graphs: Introduction.

Inequality Graphs

Graphs Australia NSW Vic Qld SA WA Tas NT ACT

The Inequality graphs present the unemployment benefits indicators by Quintiles of Socioeconomic Disadvantage of Area, for Australia, States/ Territories, and the Capital cities and Rest of State/ Territory areas. For background information and an overview on interpreting the graphs, refer to the Inequality graphs: Introduction.

Inequality Graphs within Primary Health Networks (PHNs)

Graphs NSW Vic Qld SA WA Tas NT ACT

The Inequality graphs present the unemployment benefits indicators by Quintiles of Socioeconomic Disadvantage of Area, for Australia, States/ Territories, and the Capital cities and Rest of State/ Territory areas. For background information and an overview on interpreting the graphs, refer to the Inequality graphs: Introduction.

Unemployment benefits: Data workbook

Download the workbook

View Notes on the data

Authored by PHIDU